IN RE HIJACKING OF PAN AMERICAN WORLD AIRWAYS

• Decision Date: 14 February 1996
• Docket Number: No. MDL 724 (JES),M 21-44.,MDL 724 (JES)
• Citation: 920 F. Supp. 408
• Parties: In re HIJACKING OF PAN AMERICAN WORLD AIRWAYS, INC. AIRCRAFT AT KARACHI INTERNATIONAL AIRPORT, PAKISTAN ON SEPTEMBER 5, 1986. Sadanand SINGH, Individually and as Executor of the Estate of Kala Singh; Samir Singh, By and Through Sadanand Singh, Guardian Ad Litem; Kalpana Singh, By and Through Sadanand Singh, Guardian Ad Litem, Plaintiffs, v. PAN AMERICAN WORLD AIRWAYS, INC., a New York Corporation; Pan Am World Services, Inc., a Florida Corporation; Alert Management Systems, Inc., a Florida Corporation, Alert Management Systems, Inc., a Florida Corporation, Defendants.
• Court: U.S. District Court — Southern District of New York

920 F. Supp. 408

In re HIJACKING OF PAN AMERICAN WORLD AIRWAYS, INC. AIRCRAFT AT KARACHI INTERNATIONAL AIRPORT, PAKISTAN ON SEPTEMBER 5, 1986 Sadanand SINGH, Individually and as Executor of the Estate of Kala Singh; Samir Singh, By and Through Sadanand Singh, Guardian Ad Litem; Kalpana Singh, By and Through Sadanand Singh, Guardian Ad Litem, Plaintiffs, v. PAN AMERICAN WORLD AIRWAYS, INC., a New York Corporation; Pan Am World Services, Inc., a Florida Corporation; Alert Management Systems, Inc., a Florida Corporation, Alert Management Systems, Inc., a Florida Corporation, Defendants.

No. MDL 724 (JES), M 21-44.

United States District Court, S.D. New York.

February 14, 1996.

Kreindler & Kreindler, New York City (Marc S. Moller, of counsel), for plaintiffs.

Seltzer, Caplan, Wilkins & McMahon, San Diego, California (Bruce Fagan, Reg A. Vitek, of counsel), for Singh plaintiffs.

Coddington, Hicks & Danforth, Redwood City, California (Clinton H. Coddington, of counsel), Shea & Gardner, Washington, DC (Richard M. Sharp, of counsel), for defendants.

MEMORANDUM OPINION AND ORDER

SPRIZZO, District Judge.

Plaintiffs Sadanand Singh, individually and as executor of the Estate of Kala Singh, and Samir and Kalpana Singh, through a Guardian Ad Litem, (collectively, the "Singh plaintiffs") and other plaintiffs bring the instant actions against defendants Pan American World Airways, Inc. ("Pan Am"), Pan Am World Services, Inc. ("PAWS"), and Alert Management Systems, Inc. ("AMS") for damages arising out of the hijacking of a Pan Am airplane in Karachi, Pakistan in 1986. Pursuant to 28 U.S.C. § 1404(a), the Singh plaintiffs move to transfer venue to the Southern District of California for trial on the remaining non-common claims. Pursuant to Federal Rules of Civil Procedure 50, 54(b) and 58, Pan Am cross-moves for entry of judgment limiting the amount of damages to $75,000 under the Warsaw Convention and dismissing the remaining non-common claims.¹

BACKGROUND

In 1986, in response to increasing public concern over threats against United States air carriers operating international flights, Pan Am contracted with AMS to provide a security system for its international flights. See Declaration of Bruce H. Fagan Sworn to November 12, 1993 ("Fagan Decl.") ¶¶ 2-9, Exhs. 1-8. Pan Am thereafter implemented and advertised its "Alert Security Program" as one which provided enhanced security measures. See id.

On September 5, 1986, Pan Am flight number 73 departed Bombay, India en route to New York, New York with a scheduled intermediary stop at Karachi International Airport in Karachi, Pakistan. Joint Pre-Trial Order ("PTO"), Undisputed Facts ¶ 1. Plaintiff Sadanand Singh, his wife Kala, and their two minor children Samir and Kalpana were passengers on board flight 73. Declaration of Sadanand Singh Sworn to November 12, 1993 ("Singh Decl.") ¶ 2.

While flight 73 was on the ground at Karachi International Airport, terrorists boarded and assumed control of the aircraft. PTO, Plaintiffs' Contentions of Fact ¶¶ 86-87, Defendant's Contentions of Fact ¶¶ 245-48. While in control of the aircraft, the terrorists opened gunfire on the passengers, killing about twenty passengers and injuring numerous others. See PTO, Plaintiffs' Contentions of Facts ¶¶ 95-97, Defendants' Contentions of Facts ¶ 283. During the hijacking, Kala Singh was killed, and Mr. Singh and his two children were injured. See Singh Decl. ¶ 3.

On February 23, 1987, Mr. Singh filed an action against Pan Am on behalf of himself and his two minor children in the United States District Court for the Southern District of California, claiming damages for wrongful death, personal injury and false advertising. See Singh, et al. v. Pan American World Airways, Inc., et al., 87 Civ. 3108 (JES). Numerous other wrongful death and personal injury lawsuits relating to the hijacking of Pan Am flight 73 were filed against Pan Am in various courts across the United States. See Declaration of Randolph S. Hicks, Esq. Sworn to October 15, 1993 ("Hicks Decl.") ¶ 3.

By Order filed April 7, 1987, the Judicial Panel on Multidistrict Litigation selected venue in the Southern District of New York for consolidated pre-trial proceedings pursuant to 28 U.S.C. § 1407.²See PTO, Jurisdiction ¶ 2. At the time of consolidation, eighteen actions, including the Singh action, had been filed. See Pan Am's Notice of Motion dated October 15, 1993, Ex. C. As of October 15, 1993, thirty-five actions arising out of the hijacking of Pan Am flight 73 had been consolidated before this Court.

On October 15, 1993, Pan Am moved pursuant to 28 U.S.C. § 157(b)(5), or in the alternative pursuant to 28 U.S.C. § 1404(a), to transfer eighteen cases filed in the Central District of California, including the Singh action, to the Southern District of New York for a consolidated liability trial. See PTO, Jurisdiction ¶ 1. By Order dated December 13, 1993, this Court granted Pan Am's motion and, pursuant to Federal Rule of Civil Procedure 42(a), consolidated those cases for trial of all common liability issues. Id.

On April 14, 1994, after a six week jury trial, the jury found that Pan Am's conduct in connection with the Alert Security Program constituted willful misconduct. However, the jury also found that the willful misconduct was not a proximate cause of the damages claimed.³

Thereafter, pursuant to 28 U.S.C. 1404(a), the Singh plaintiffs moved for transfer of the remaining claims to the Southern District of California⁴ for trial on the ground that since the Singh plaintiffs actually relied upon the misrepresentations made by the defendants in connection with the Alert Security Program, their claims were not common to those already tried. Pan Am opposed that motion on the grounds that (1) it is entitled to judgment notwithstanding the verdict on the issue of willful misconduct; (2) that any remaining claims are, in any event, preempted both by the Warsaw Convention and by the Airline Deregulation Act.⁵ Pan Am also sought entry of judgment under the Warsaw Convention in the amount of $75,000 per passenger seat and dismissal of all remaining claims.⁶

DISCUSSION

The Warsaw Convention⁷ limits liability of international air carriers for damages resulting from an "accident," which has been construed to include hijacking or terrorist activity. See Pflug v. Egyptair Corp., 961 F.2d 26, 29 (2d Cir.1992); Day v. Trans World Airlines, Inc., 528 F.2d 31, 33 (2d Cir.1975) (en banc), cert. denied, 429 U.S. 890, 97 S.Ct. 246, 50 L.Ed.2d 172 (1976). Article 17 of the Warsaw Convention states that:

The Carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.

Article 22 of the Warsaw Convention limits the liability created by Article 17.⁸ The Montreal Agreement,⁹ which subsequently modified the Warsaw Convention, subjects the airlines to absolute liability when the flight itinerary includes a stop in the United States. The Montreal Agreement states that:

The limit of liability for each passenger for death, wounding, or other bodily injury shall be the sum of US $75,000 inclusive of legal fees and costs, except that, in case of a claim brought in a State where provision is made for separate award of legal fees and costs, the limit shall be the sum of US $58,000 exclusive of legal fees and costs.

Article 25 of the Convention lifts the liability limitation set forth in Article 22 where the damage is "caused by" the carrier's willful misconduct. Article 25 provides:

(1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as ... equivalent to willful misconduct.

Pan Am's threshold contention is that the Court need not even address the issues of whether, and to what extent, the jury's finding of willful misconduct in the conduct of its "Alert Security Program" can or should bar any remaining claims on behalf of passengers who actually relied upon those representations, because that finding should be set aside as unsupported by the trial proof. The Court rejects that contention.

Ample evidence was elicited at trial which rationally supports the jury's conclusion that Pan Am made representations of enhanced security measures in connection with its "Alert" program, which Pan Am either 1) knew could not or would not be implemented; or 2) had no basis to believe that they could or would be implemented. Without reciting in detail all of the trial proof regarding this issue, suffice it to say that the evidence established, inter alia, (1) that Pan Am made the alleged misrepresentations in an effort to encourage increased travel at a time when concerns about security had led to declining revenues, Trial Transcript ("Tr.") at 80, 204, 356; (2) that Pan Am was aware that terrorist activity, especially at European and other middle eastern high risk airports, including Karachi, was a major factor in passengers' security fears, id. 81, 82; (3) that very little was actually done to provide enhanced security at any foreign airports, notwithstanding Pan Am's well publicized campaign, id. at 209-19, 444-47, 480, 828-29, 898; see also Plaintiffs' Exhs. 2, 6, 9, 119, 33A; and (4) that virtually nothing was done at Karachi Airport, where Pan Am clearly knew that it had very little, if any, control over airport security, Tr. at 93, 116, 248-49, 323, 415, 417, 630, 635-36, 692, 747, 810, 1045, 1983. In the face of this evidence and other proof which is set forth in greater detail in Plaintiffs' Memorandum of Law in Opposition To Defendant Pan-Am's Post-Trial Motion at 4-13, defendants' argument that the jury verdict was either rationally unsupported or...